Chevron, Engine No. 1, and GE Vernova: Powering U.S. Data Centers for AI Leadership

In a strategic move to leverage American energy abundance and drive AI dominance, Chevron U.S.A. Inc. (NYSE: CVX), Engine No. 1, and GE Vernova (NYSE: GEV) have announced a joint venture to build scalable, reliable power solutions for U.S.-based data centers running on U.S. natural gas. This partnership aims to establish the first multi-gigawatt-scale co-located power plant and data center during President Trump's second term, directly addressing the need for affordable, reliable energy to power U.S. data centers and enable current and future generations of AI.

The first projects, dubbed "power foundries," are expected to leverage seven U.S.-made GE Vernova 7HA natural gas turbines, secured under a slot reservation agreement, on an accelerated timeline. These projects will serve co-located data centers in the U.S. Southeast, Midwest, and West regions, with power generation initially bypassing the existing transmission grid to reduce the risk of increasing electricity prices for consumers. The joint development plans to deliver up to four gigawatts (GW) of power, equivalent to powering 3-3.5 million U.S. homes, with initial in-service targeted by the end of 2027 and potential for project expansion beyond this capacity.

The projects are designed with the flexibility to integrate lower carbon solutions, such as carbon capture and storage (CCS) – capable of capturing >90% of the CO2 from the turbines – and renewable energy resources. This commitment to sustainability aligns with the environmental aspect of ESG, demonstrating a dedication to reducing greenhouse gas emissions and combating climate change.

Chris James, founder and chief investment officer of Engine No. 1, emphasized the strategic importance of this partnership: "Energy is the key to America’s AI dominance. By using abundant domestic natural gas to generate electricity directly connected to data centers, we can secure AI leadership, drive productivity gains across our economy, and restore America’s standing as an industrial superpower." Mike Wirth, chief executive officer and chairman of Chevron Corporation, echoed this sentiment, highlighting the company's role in bringing to fruition President Trump's vision for a new American golden age powered by enormous energy resources and an unrivaled workforce.

The co-location model employed by this partnership offers several key advantages, including affordable and reliable energy, reduced grid burden, scalability and flexibility, job creation, and reindustrialization. By leveraging American energy abundance, the partnership aims to secure AI leadership, drive productivity gains, and restore America's standing as an industrial superpower.

In conclusion, the strategic alliance between Chevron, Engine No. 1, and GE Vernova addresses the growing demand for electricity in U.S. data centers, particularly for AI development, while promoting energy independence, sustainability, and economic growth. The integration of carbon capture and storage (CCS) and renewable energy resources in the project design contributes to the ESG aspects of the investment, with long-term benefits including reduced carbon intensity, energy independence, and technological advancement. This partnership demonstrates a commitment to driving American AI leadership through strategic investments in energy infrastructure and innovation.